Agreement on economic governance rules

Finance ministers from the EU's member states said today that they had reached agreement on a range of rules aimed at strengthening economic governance.

Officials from Poland, which holds the rotating presidency of the Council of Ministers, said that the last outstanding issues were ironed out during the meeting of finance ministers in Wrocław, Poland, today.

It came after Polish diplomats and the European Parliament announced yesterday that a preliminary agreement had been reached.

Speaking to reporters after this afternoon’s meeting, Jacek Rostowski (pictured), Poland’s finance minister, said that the deal had been the result of “intensive work” that will “create the basis for future governance in the European Union”.

“Agreement on all points of disagreement has been definitively reached and this is why we a have a significant certainty that these acts will be passed,” he said.

Member states and MEPs have been at odds for months over how decisions should be reached on applying sanctions on countries that fail to respect budget limits.

In a victory for the Parliament, the compromise will see reverse qualified majority voting (RQMV) used, under which a qualified majority of member states would be needed to block a proposal by the European Commission to impose sanctions.

Both sides also agreed that the Parliament will be able to invite national finance ministers to explain their national budgetary plans to MEPs. However, member states are free to turn down the requests.

The deal also includes extended surveillance of budgetary imbalances, including trade surpluses.

Better behaviour

Olli Rehn, the European commissioner for economic and monetary affairs, said the agreement would lead to improved behaviour in the way EU member states run their economies.

He said: “This package is especially important because it translates one of the lessons of the current crisis into concrete action. Prevention is always better and cheaper than correction.”

The Parliament’s economic and monetary affairs committee will review the six legislative proposals next week (22 September). The full Parliament is expected to vote on the package during its 26-29 September plenary session in Strasbourg.

Finance ministers will formally vote on the legislation at a meeting on 4 October, enabling the new rules to enter into force swiftly after that.

Jan Kees de Jager, the Dutch finance minister, welcomed the agreement but said that economic governance now needed to go further.

“We need to take a quantum leap,” he said. “We need to take this opportunity to take further steps.”

Finance ministers spent the rest of this afternoon’s meeting talking about the prospects of “ever greater integration within the European Union, and particularly in the eurozone,” Rostowski said.

The ministers will reconvene tomorrow morning when they will discuss financial sector reform.